LA Collections "Sheriff" To Target $541M In Unpaid Bills
LOS ANGELES (CBS) — If you have an unpaid parking tickets or overdue library fines, get ready: there's a new sheriff in town.
City officials in Los Angeles vowed on Monday to bring in a "collections sheriff" whose sole responsibility would be collecting millions of dollars owed to the city to ease a budget crisis that has forced severe cuts in services.
Mayor Antonio Villaraigosa and City Council leaders noted the city has $541.1 million in accounts receivables — not including uncollected taxes.
Of that amount, 76.6 percent is more than 120 days past due and 42.2 percent is more than two years past due, according to a report released by the Ad Hoc Commission on Revenue Efficiency.
Study Recommends Efficiency Watchdog: KNX 1070's John Brooks Reports
"When we look at the money that we literally leave on the table each year ... it's unconscionable," said City Council President Eric Garcetti.
"It's unconscionable when this has required us to cut services. It's unconscionable when the people of Los Angeles deserve this money. It's really the people who have been shortchanged."
Top city officials embraced CORE's recommendation to create an inspector general or "collections sheriff" post before the end of 2010, after noting a recent audit showed the city is collecting only 53 percent of what it bills.
"Look, let's be clear: if you look at any big city anywhere in the country, there's not one of them that collects 100 percent of the debt," Villaraigosa said. "But there are a number of places that do a better job than we do. And we want to be among the best, and I believe with these recommendations we're that much closer to that goal."
Villaraigosa said details about the inspector general's powers andbudget are still being worked out.
Boosting collections by even a small margin could bring in significant revenue, Garcetti said.
"Ten percent of what's out there (accounts receivables) is $50 million," Garcetti noted. "The kind of coverage that we've talked about — restoring the Fire Department, putting the libraries back to a six-day
(schedule) — I mean this could be achieved with 10, 15 percent of our collections being improved."
Garcetti acknowledged that collecting all of the debt would be impossible since some are ambulance fees owed by the homeless and parking tickets owed by tourists and others who have left the state.
Councilman Bernard Parks, who chairs the city's Budget and Finance Committee, expects revenues to go up within months if all of CORE's recommendations are implemented immediately.
"During this fiscal year, we should see some benefits, and those benefits are going to give us the ability to look at furloughs differently, look at whether there's a need to eliminate more positions," Parks said.
"I don't know if it will give us the opportunity to hire back, but we certainly will be able to add services by the elimination of furloughs, and allowing departments to function more in line with what their budgeted
resources are," he said.
CORE — led by attorney Ron Galperin and former councilwoman Cindy Miscikowski -- listed the following recommendations in its "Blueprint for Reform of City Collections" :
— create an inspector general who would spend the next two or three years trying to boost revenue;
— centralize the city's billing system and invest in modern technology that would allow taxpayers to pay electronically;
— intensify consequences for delinquencies, with interest, penalties, liens and public reporting; and
— maximize use of collection agencies, because currently only 48.5 percent of accounts eligible for referral to collection agencies are actually being referred.
Councilman Paul Koretz, who chairs the council's Audits and Governmental Efficiencies Committee, noted that many audits over the years have listed similar recommendations, and have been ignored.
"That kind of longtime irresponsible management is an embarrassing disgrace and has proved to be a costly threat to our city's fiscal well-being," Koretz said.
"That's why we need to adopt a no-tolerance policy towards bureaucratic resistance and departmental indifference regarding collections," he said.
"Anyone who can't get with the program should move towards the door and get out. If we can't fix our city's collections procedures and practices, heads should roll."
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